The geopolitical/economical climate is changing so fast that it is giving me a very difficult time trying to piece together what the sense of reality is out there.
Globe and Mail article: Canada to boost energy exports to U.S. to aid in supply crisis triggered by Russia’s war in Ukraine
Canada says its producers can boost exports of oil and natural gas to the United States this year, as part of an international effort to help the world move away from Russian energy after Moscow’s invasion of Ukraine.
…
“It will take some time to fully move away from Russian oil and gas for some of these countries like Germany that are quite heavily dependent,” [Minister of Natural Resources] Mr. Wilkinson said. “Any additional amounts can help to start that process.”
There is no way such a statement would ever be made inadvertently by a cabinet minister.
This is what I consider to be a political “trial probe”. If there is no outrage by the constituent groups that aren’t already organically opposed to this (e.g. Sierra Club, Greenpeace, etc.), it will proceed.
It is the oil and gas companies themselves that choose how much to produce, but if this particular government is back-peddling on their hostility (which can be characterized as extremely hostile to simply hostile), analysts will most definitely warrant a multiple re-rating to account for mild less uncertainty on this government that will “phase out fossil fuels”.
Things are turning. Watch out for the turn, we are in the middle of it.
… as part of an international effort to help the world move away from Russian energy
This should read instead “to help the world that is friendly to the west move away from Russian energy”. Unless and until “unfriendly” or “unethical” oil (or whatever other moniker we like) begins to get shut-in, there is no room for more Canadian oil – unless we assume there is still substantial longer term global (not just friendly) demand growth. So far, it seems there will be unfriendly buyers of Russian oil and other unfriendly sources to backfill any degradation of Russian capability.
Yes, the world will need O&G for decades. How much and how long remain debatable but to assume very long term growth vs decline in total global demand is a bold (and unwise in my books) bet.
So this promise by Ottawa is just how it reads – maximizing the use of existing infrastructure to help offset the pain of short to mid-term reconfiguration of sources and destinations of O&G vs supporting the development of projects that materially increase Canadian capacity to produce.
Trudeau just eliminated the prospect of supply growth from Canada.
Hello capital returns……..
Its crazy that the federal government has spent the last 6 years trying to stifle oil and gas production in Alberta, now tries to take credit for boosting oil production lol. Its not their decision anyway, its the oil and gas producers. Canada is run by clowns.
https://financialpost.com/commodities/energy/canada-expected-to-announce-boost-in-oil-exports-to-help-ease-energy-supply-crisis
What do you mean by ‘the turn’?